A common reason given for purchasing coins is as an investment. Coin prices can be cyclical, and prices may drop for coins that are not in great long-term demand. In addition to demand, condition and rarity (which can be estimated via mintage figures) are also determinants in pricing. Age of a coin per se is not a significant factor.

Many of the reasons given for investing in coins are similar to those given for investing in stamps or gold. As with most collectibles, a coin collection does not produce income until it is sold, and may even incur costs (e.g. for safe deposit box storage) in the interim.

While collecting for pleasure makes an enjoyable hobby, people entering the field primarily to make a profit are warned to study before buying. Certain companies, some of whom may advertise on television, in newspapers, or in popular magazines, are alleged to make outlandish claims about the present and future values of their wares. After learning the basics of the field it is often possible to make better purchases from reputable dealers.

In coin collecting the condition of a coin is paramount to its value; a high-quality example is often worth many times as much as a poor example—although there are always exceptions to this general rule. Collectors have created systems to describe the overall condition of coins. One older system describes a coin as falling within a range from “poor” to “uncirculated”. The newer Sheldon system, used primarily in the US, has been adopted by the American Numismatic Association. It uses a 1–70 numbering scale, where 70 represents a perfect specimen and 1 represents a coin barely identifiable as to its type.

Several coin grading services will grade and encapsulate coins in a labeled, air-tight plastic holder. This process is commonly known as “slabbing”, and is most prevalent in the US market. Two highly respected grading services are the Numismatic Guaranty Corporation (NGC) and Professional Coin Grading Service (PCGS). However, professional grading services are the subject of controversy because grading is subjective—a coin may receive a different grade by a different service, or even upon resubmission to the same service. Due to potentially large differences in value over slight differences in a coin’s condition, some commercial coin dealers will repeatedly resubmit a coin to a grading service in the hopes of a higher grade. Buyers are encouraged to look into the quality and features of the various grading services before deciding to purchase a coin based solely on the grade given by a service. The grading services came into being (PCGS being first) in an effort to bring more safety to investors in rare coins. While they have reduced the number of counterfeits foisted upon unsuspecting investors, and have improved matters substantially, because of the differences in market grading (which determines the price) and technical grading, the goal of creating a sight-unseen market for coins remains somewhat elusive.

Damage of any sort, such as holes, edge dents, repairs, cleaning, re-engraving or gouges, can substantially reduce the value of a coin. Specimens are occasionally “whizzed”–cleaned or polished in an attempt to pass them off as being higher grades or as proof strikes. In general, the buyer is cautioned to be careful of any unknown seller’s claims. Because of the substantially lower prices for cleaned or damaged coins, some specialize in their collection. There is a market for almost any rare or obsolete coin.

Many people search loose change and bank wrapped rolls of coins for collectible coins. Amazingly, old coins continue to circulate. Some over 100 years old! Search for terms like “coin roll hunting” to see web sites that are dedicated to this hobby.

Coin collectors often begin by saving coins they have received in circulation, but found interesting. These may be the remnants of change from an international trip, or an old coin found in circulation. Over time, if their interests increase, chance will not be sufficient to satisfy the demands for new specimens, and a potentially expensive hobby is born. Some become dedicated generalists, looking for a few examples of everything. If they have enough resources, this can result in an astounding collection, as that of King Farouk of Egypt, who collected everything (and not just coins either). Some are completists, wanting an example of everything within a certain set. For example, Louis Eliasberg was the only collector thus far to assemble a complete set of known coins of the United States.

At the very highest levels of coin collecting, it can become a highly competitive sport. Recently, this has exhibited itself in registry sets, where the most complete set of coins with the highest numerical grades assigned by grading services are published by the grading service. This can lead to astronomical prices as dedicated collectors strive for the very best examples of each date and mint mark combination.

Most collectors determine that they must focus their limited financial resources on a narrower interest. Some focus on coins of a certain nation or historic period, some collect coins from various nations, some settle on error coins or exonumia, such as currency, tokens or military challenge coins.

Every collector collects what interests them, and there are as many ways of collecting as there are collectors. However a few themes are common and are often combined to a goal for a collection.

A number of common collection themes include: